BETA

Activities of Steven WOOLFE related to 2013/0314(COD)

Plenary speeches (1)

2016/11/22
Dossiers: 2013/0314(COD)

Amendments (43)

Proposal for a regulation
Recital 1

(1) The pricing of many financial instruments and financial contracts depends on the accuracy and integrity of benchmarks. Cases of manipulation of interest rate benchmarks such as LIBOR and EURIBOR, as well as allegations that ~~energy, oil and~~ foreign exchange benchmarks have been manipulated, have demonstrated that benchmarks whose setting processes share certain characteristics, such as being subject to conflicts of interest, the use of discretion and weak governance, may be vulnerable to manipulation. Failures in, or doubts about, the accuracy and integrity of indices used as benchmarks may undermine market confidence, cause losses to consumers and investors and distort the real economy. It is therefore necessary to ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 27

(27) Many benchmarks are determined from input data that is provided by regulated venues~~, energy exchanges and emission allowance auctions. These venues are~~ subject to regulation and supervision that ensures the integrity of the input data, provides for governance requirements and procedures for the notification of breaches. Therefore these benchmarks are released from certain obligations in order to avoid dual regulation and because their supervision ensures the integrity of the input data used.

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 29

(29) Different types of benchmark and different benchmark sectors have different characteristics, vulnerabilities and risks. The provisions of this Regulation should be further specified for particular benchmark sectors and types. Interbank interest rate benchmarks are benchmarks that play an important role in the transmission of monetary policy and so it is necessary to specify how these provisions would apply to these benchmarks in this Regulation. ~~Commodity benchmarks are widely used and have sector specific characteristics and so it is necessary to specify how these provisions would apply to these benchmarks in this Regulation.~~

2015/01/23
Committee: ECON

Proposal for a regulation
Recital 33

(33) Consumers may enter into financial contracts, in particular mortgages and consumer credit contracts that reference a benchmark, but unequal bargaining power and the use of standard terms mean that they may have a limited choice about the benchmark used. It is therefore necessary to ensure that the responsibility for assessing the suitability of such a benchmark for the consumer rests with the lenders or creditors who are supervised entities because they have a greater ability to choose the benchmark. However the suitability assessment should not be required by this Regulation for financial instruments referencing a benchmark, as it is already provided for in Directive [MIFID].deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 1

~~1. This Regulation shall apply to the provision of benchmarks, the contribution of input data to a benchmark and the use of a benchmark within the Union.~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 2 – point a

~~(a) Members of the European System of Central Banks (ESCB).~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 2 – point b

(b) Central banks of third countries whose legal framework is recognised by the Commission as providing for principles, standards and procedures equivalent to the requirements on the accuracy, integrity and independence of the provision of benchmarks provided for by this Regulation.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 2 – point b a (new)

(ba) benchmarks in respect of which the administrator has no discretionary influence over the calculation or composition of the benchmark;

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 2 – point b a (new)

(ba) commodity benchmarks.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 2 – paragraph 3 – subparagraph 1

~~The Commission shall establish a list of central banks of third countries referred to in paragraph 2(b).~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 2

(2) ‘benchmark’ means any index by reference to which the amount payable under a financial instrument or a financial contract, or the value of a financial instrument is determined ~~or an index that is used to measure the performance of an investment fund~~;

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 5

~~(5) ‘user of a benchmark’ means any person who issues or owns a financial instrument or is party to a financial contract which references a benchmark;~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 11

(11) ‘regulated data’ means input data that is contributed directly from a trading venue as defined in point (25) of paragraph 1 of Article 2 of [MIFIR] or approved publication arrangement as defined in point (18) of paragraph 1 of Article 2 of [MIFIR ] or an approved reporting arrangement as defined in point (20) of paragraph 1 of Article 2 of [MIFIR] in accordance with mandatory post trade data requirements or an electricity exchange as referred to in point (j) of paragraph 1 of Article 37 of Directive 2009/72/EC19 or a natural gas exchange as referred to in point (j) of paragraph 1 of Article 41 of Directive 2009/73/EC20 or an auction platform referred to in Article 26 or in Article 30 of Regulation (EU) No 1031/2010 of the European Parliament and of the Council; ~~__________________ 19 20~~OJ L 211, 14.8.2009, p. 55. OJ L 9, 14.8.2009, p. 112.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 3 – paragraph 1 – point 20

(20) ‘commodity benchmark’ means a benchmark where the underlying asset for the purposes of point (1)(c) of this Article is a commodity within the meaning of point (21) of Article 2 of Commission Regulation (EC) No 1287/200627 ~~; Emission allowances as defined in point (11) of Section C of Annex I of [MiFID] shall not be considered commodities for the purpose of this Regulation~~; __________________ 27 OJ L 241, 2.9.2006, p. 1.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 2

~~2. In addition to the requirements of the Title II, the specific requirements set out in Annex III shall apply to commodity benchmarks.~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 3 – introductory part

3. The Commission shall be empowered to adopt delegated acts in accordance with Article 39 to specify, or adjust, in light of market and technological developments and international developments, the following elements of Annex~~es II and I~~ II:

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 3 – point j

~~(j) The criteria and procedures for developing the benchmark (Annex III point 1 a)~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 3 – point k

~~(k) The elements to be included in the methodology and the description of the methodology (Annex III point 1 and 2)~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 12 – paragraph 3 – point l

~~(l) The requirements of the administrator regarding the quality and the integrity of the benchmark calculation and the content of the description attached to each calculation (Annex III point 5 and 6)~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 18

1. Where a supervised entity intends to enter into a financial contract with a consumer, that supervised entity shall first obtain the necessary information regarding the consumer's knowledge and experience with respect to the benchmark, his financial situation and his objectives in respect of that financial contract, and the benchmark statement published in accordance with Article 15 and shall assess whether referencing the financial contract to that benchmark is suitable for him. 2. Where the supervised entity considers, on the basis of the assessment under paragraph 1, that the benchmark is not suitable for the consumer, the supervised entity shall warn the consumer in writing with reasons.Article 18 deleted Assessment of suitability

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1 – introductory part

1. Benchmarks provided by an administrator established in a third country may be used by supervised entities in the Union ~~provided that the following conditions are complied with:~~.

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1 – point a

(a) the Commission has adopted an equivalence decision in accordance with paragraph 2, recognising the legal framework and supervisory practice of that third country as equivalent to the requirements of this Regulation;deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1 – point b

~~(b) the administrator is authorised or registered in, and is subject to supervision in, that third country;~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1 – point c

(c) the administrator has notified ESMA of its consent that its actual or prospective benchmarks may be used by supervised entities in the Union, the list of the benchmarks which may be used in the Union and the competent authority responsible for its supervision in the third country;deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1 – point d

~~(d) the administrator is duly registered under Article 21; an~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 1 – point e

~~(e) the cooperation arrangements referred to in paragraph 3 of this Article are operational.~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 1

~~The Commission may adopt a decision stating that the legal framework and supervisory practice of a third country ensures that:~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 1 – point a

(a) administrators authorised or registered in that third country comply with binding requirements which are equivalent to the requirements resulting from this Regulation, in particular taking into account if the legal framework and supervisory practice of a third country ensures compliance with the IOSCO principles on financial benchmarks published on 17 July 2013; andeleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 1 – point b

~~(b) the binding requirements are subject to effective supervision and enforcement on an on-going basis in that third country.~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 2

~~Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 38(2).~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 1

1. ESMA shall register the administrators that have notified it of their consent referred to in Article 20(1)(c). The register shall be publicly accessible on the website of ESMA and shall contain information on the benchmarks which the relevant administrators are permitted to provide and the competent authority responsible for their supervision in the third country.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 2

2. ESMA shall withdraw the registration of an administrator referred to in paragraph 1 from the register referred to in paragraph 1 when: (a) ESMA has well-founded reasons, based on documented evidence, to consider that the administrator is acting in a manner which is clearly prejudicial to the interests of users of its benchmarks or the orderly functioning of markets; or (b) ESMA has well-founded reasons, based on documented evidence, to consider that the administrator has seriously infringed the national legislation or other provisions applicable to it in the third country and on the basis of which the Commission has adopted the decision in accordance with Article 20(2).deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 3

3. ESMA shall take a decision under paragraph 2 only if the following conditions are fulfilled: (a) ESMA has referred the matter to the competent authority of the third country and that competent authority has not taken the appropriate measures needed to protect investors and the proper functioning of the markets in the Union, or has failed to demonstrate that the administrator concerned complies with the requirements applicable to it in the third country; (b) ESMA has informed the competent authority of the third country of its intention to withdraw the registration of the administrator, at least 30 days before the withdrawal.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 21 – paragraph 4

~~4. ESMA shall inform the other competent authorities of any measure adopted in accordance with paragraph 2 without delay and shall publish its decision on its website.~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Article 30 – paragraph 1 – point c

(c) in relation to benchmarks whose input data is commodities, request information from market participants on related spot markets according to standardized formats, obtain reports on transactions, and have direct access to traders' systems;deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section A – part I – point 1

1. The provision of a benchmark shall be operationally and functionally separated from any part of the administrator's business that may create an actual or potential conflict of interest. ~~If these conflicts cannot be managed, the benchmark operator shall cease any activities or relationships that create these conflicts or cease producing the benchmark.~~

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section A – part I – point 3 – point b

(b) shall specifically mitigate or disclose conflicts due to the administrator's ownership or control, or due to other interests in its group or as a result of other persons that may exercise influence or control over the administrator in relation to setting the benchmark.

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section A – part I – point 4 – point c

~~(c) their interests and business connections shall not compromise the administrator's functions;~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section A – part I – point 4 – point d

~~(d) shall be prohibited from contributing to a benchmark determination by way of engaging in bids, offers and trades on a personal basis or on behalf of market participants; an~~deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section A – part I – point 4 – point e

(e) are subject to effective procedures to control the exchange of information with other employees, any other involved in activities that may create a risk of conflicts of interest or where that information may affect the benchmark.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section A – part IV – point 19

19. The administrator shall keep the records set out in point 1 for at least five years in such a form that it is possible to replicate and fully understand the benchmark calculations and enable an audit or evaluation of the input data, calculations, judgements and discretion. Records of telephone conversation or electronic communications recorded in accordance with point 18(f) shall be provided to the persons involved in the conversation or communication upon request and shall be kept for a period of three years.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section C – part II – point 3

3. An administrator shall use benchmark methodologies that: (a) are rigorous, continuous and capable of validation, including back-testing; and (b) are resilient and ensure that the benchmark can be calculated in the widest set of possible circumstances.deleted

2015/01/23
Committee: ECON

Proposal for a regulation
Annex I – section D – point 2

~~2. The administrator shall ensure that the code of conduct complies with this Regulation.~~deleted

2015/01/23
Committee: ECON